QL Resources Berhad (428915-X)
26
Group Managing Director’s Report
(Cont’d.)
The nature of QL’s business especially ILF, is one where we
have to be always vigilant and cautious in our approach. In
managing risks, QL took proactive measures in our disease
control and will continue to be alert on our biosecurity
measures. Due to challenging farming environment
conditions such as loose authority guidance on disease
control measures and densely populated farming areas
which make disease control a more challenging task in the
Indonesia unit, we therefore have decided to review our
expansion programme of layer farming in this country.
The impact of the weak Ringgit on farming cost was
lessened when commodity prices fell. The ILF division was
also confronted by a major egg price correction in Peninsular
Malaysia after a strong egg price in the previous financial
year.
On a positive note, expansion of the ILF division is being
planned and undertaken strategically to support the
business chain and operations. QL will be building our
capacity for raw material trade regionally in Indonesia and
Vietnam. At the same time, a commercial feed mill is in the
books for Indonesia to support QL’s own needs and to
supply to other farms. Meanwhile, a new feed mill cum
warehouse is under construction in Kuching with a capacity
to produce 10,000 metric tonnes per 12-hour shift to support
the ILF activities in East Malaysia.
The broiler integration business in East Malaysia and
Indonesia will be strengthened due to significant
breakthrough in our broiler farm productivity. We are looking
forward to the completion of the construction of the new third
broiler farm in Kota Kinabalu which has a capacity of 50,000
birds per month. Also in the pipeline is the new poultry
downstream processing plant in Kota Kinabalu which is
awaiting its halal certification. We are also planning to
construct a new poultry processing plant in Tawau by the
end of FY2017 and when ready in 2 years’ time, it will be
able to process 4,000 birds per hour.
Meanwhile, layer farms will be further developed in
Peninsular Malaysia and Vietnam. Work has started on the
integrated layer farm in Raub, Pahang which has received
the 10-year Pioneer Status investment incentive under the
East Coast Economic Region initiative. When Phase 1 of
this project is completed in two years’ time, this new layer
farm will be outputting 500,000 eggs per day. The full project
which cost RM50 million is scheduled for completion by
2019.
QL is also in the process of acquiring land in Vietnam, Johor
and Perak to ramp up ILF production capacity.
We will continue to put more resources in our egg branding
and
marketing
in
Malaysia
and
Indonesia.
To-date, more than 40% of our eggs sold in Indonesia is
branded under ‘QL Eggs’. Eggs are sold to modern chain
stores as well as to McDonald's in Jakarta and Bandung. In
Malaysia, volume sold under the branded category has
improved significantly.
These new operations that are underway will reinforce QL’s
strength as one of the leading ILF company in Southeast
Asia.
ILF Outlook Moving Forward
Our new commercial feed mill in Indonesia has contributed
positively in FY2016 and we hope to have greater feed mill
quantity in FY2017.
Broiler farming efficiency has also improved significantly in
FY2016 and we hope to continue to do so in FY2017.
After a year of price consolidation in FY2016, the Peninsular
Malaysia egg prices are projected to normalise in FY2017.
Improvement in Vietnam’s operation is on the table as we
work hard to increase production output.
